Kodak Completes Sale of Remote Sensing Systems to ITT Industries

ROCHESTER, N.Y., Aug. 13 --
Eastman Kodak Company (NYSE: EK)
announced that it has completed the sale of its Remote Sensing Systems (RSS)
operations to ITT Industries, Inc. (NYSE: ITT) for $725 million in cash.

RSS was part of Kodak’s Commercial &
Government Systems’ operation within the Commercial Imaging Group and its
customers include NASA, other U.S. government agencies, and aerospace and
defense companies. Kodak’s RSS operation, including Research Systems, Inc.
(RSI), had sales last year of approximately $425 million.

All 2,000 RSS and RSI employees will transfer to ITT Industries, with
Rochester as the headquarters for ITT’s new Space Systems Division. James
Manchisi, president of RSS, will join ITT Industries Space Systems Division as
President, reporting to Henry J. Driesse, President, ITT
Industries, Defense.

“The sale of RSS is consistent with
Kodak’s digitally oriented strategy to focus on the consumer, commercial and
health imaging markets,” said Daniel A. Carp, Chairman and Chief Executive
Officer, Eastman Kodak Company. “By selling RSS, we have sharpened our focus
on our key growth markets, and have provided RSS employees with the
opportunity to work for a company that serves the aerospace and defense
markets.”

This action by Kodak further aligns its
product portfolio with its business strategy. The proceeds of the sale will
further strengthen the company’s financial position and flexibility during its
business model transition.

Net of tax and transaction costs, but
subject to post-closing adjustments, Kodak expects to realize approximately
$475 million in cash. The sale of RSS will result in an after-tax gain
of approximately $390 million, excluding the potential impact of any
settlement or curtailment gains or losses that may be incurred in connection
with pension and postretirement benefit plans.

Headquartered in White Plains, New York, ITT Industries suppliesadvanced
technology products and services in key markets including:defense
communication, opto-electronics, information technology andservices; fluid and
water management including water treatment;electronic interconnects and
switches; and other specialty products. Thecompany generated $5.63 billion in
2003 sales and employs approximately 36,000 people around
the world.

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Certain statements in this press release may be forward
looking in nature, or "forward-looking statements" as defined in the United
States Private Securities Litigation Reform Act of 1995.

Actual results may differ from those expressed or implied
in forward-looking statements. In addition, any forward-looking statements
represent our estimates only as of the date they are made, and should not be
relied upon as representing our estimates as of any subsequent date. While we
may elect to update forward-looking statements at some point in the future, we
specifically disclaim any obligation to do so, even if our estimates change.
The forward-looking statements contained in this press release are subject to
a number of factors and uncertainties, including:

The nature and pace of technology evolution, including the
analog-to-digital transition;

Continuing customer consolidation and buying power;

General economic, business, geopolitical and public health
conditions; and other factors and uncertainties disclosed from time to time in
our filings with the Securities and Exchange Commission.

Any forward-looking statements in this press release
should be evaluated in light of these important factors and uncertainties.

About Eastman Kodak
Company and infoimaging

Kodak is the leader in helping people
take, share, print and view images – for memories, for information, for
entertainment. The company is a major participant in infoimaging, a $385
billion industry composed of devices (digital cameras and flat-panel
displays), infrastructure (online networks and delivery systems for images)
and services & media (software, film and paper enabling people to access,
analyze and print images). With sales of $13.3 billion in 2003, the company
comprises several businesses: Health, supplying the healthcare industry with
traditional and digital image capture and output products and services;
Graphic Communications Group, offering on-demand color printing and networking
publishing systems consisting of three wholly owned subsidiaries: Encad, Inc.,
NexPress Solutions, and Kodak Versamark; Commercial Imaging, offering image
capture, output and storage products and services to businesses and
government; Display & Components, which designs and manufactures
state-of-the-art organic light-emitting diode displays as well as other
specialty materials, and delivers optics and imaging sensors to original
equipment manufacturers; and Digital & Film Imaging Systems, providing
consumers, professionals and cinematographers with digital and traditional
products and services.